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Home My WebLink AboutINS-2024-224 - Phase 2 Update - Kitchener Utilities Clean Energy Transition Strategy Infrastructure Services Department www.kitchener.ca REPORT TO: Special Council DATE OF MEETING: May 27, 2024 SUBMITTED BY: Greg St. Louis, Director, Utilities Gas & Water, 519-741-2200 ext. 4538 PREPARED BY: Kate Daley, Senior Strategist, Carbon and Energy Planning, 519-741- 2200 ext. 4246 WARD(S) INVOLVED: All DATE OF REPORT: May 27, 2024 REPORT NO.: INS-2024-224 SUBJECT: Phase 2 Update Kitchener Utilities Clean Energy Transition Strategy RECOMMENDATION: For discussion REPORT HIGHLIGHTS: The purpose of this report is to provide a progress update on Phase 2 of the Kitchener Utilities Clean Energy Transition Strategy. The key finding of this report is that staff have identified several types of potential energy business activities under four main themes. More information is needed about each type of business activity in order to determine whether and how it might play a role in the integrated approach that will be recommended in the strategy. Investigation considerations will be informed by the s, and these considerations are the focus of the scheduled strategic session of Council. There are no financial implications of the report at this time. Community engagement in Phase 1 of the project included customers, community members, stakeholders, Kitchener committees, staff, and councillors. Phase 2 engagement to date has included stakeholder and staff engagement, and the breadth of contributions from both phases has guided the development of the list of potential business activities. This report supports Cultivating a Green City Together: Focuses on a sustainable path to a greener, healthier city; enhancing & protecting parks & natural environment while transitioning to a low-carbon future; supporting businesses & residents to make climate-positive choices. Executive Summary: Phase 2 of the Kitchener Utilities Clean Energy Transition Strategy project consists of collaborativ-facing energy businesses in light of the clean energy transition, and recommending an integrated business approach based on the information gathered. Staff have identified several types of potential energy business activities under four main themes, which have been built from the results of engagement submissions from both phases *** This information is available in accessible formats upon request. *** Please call 519-741-2345 or TTY 1-866-969-9994 for assistance. of the project to date. More information is needed about each type of business activity in order to determine whether and how it might play a role in the integrated approach that will be recommended in the strategy. . The focus of the Council strategic session will be to discuss information gathering considerations to support For this strategic session discussion with City Council, staff have identified the following questions: 1. What are your reflections on the business activity themes and what theme are you most curious about? 2. Referring to Appendix A, are there any considerations for investigation that you feel: a. Should be prioritized or de-prioritized b. Should be added BACKGROUND: This three-phase project will develop a strategy to guide us as we evolve our energy business to continue to be financially successful and provide valued services throughout the energy transition. The project scope includes -facing energy businesses, which are housed in the Gas and Water Division in Infrastructure Services. Table 1: Project Phases Project Timing Phase Phase 1 Complete building relationships and relational engagement with Council, staff, (2023) understanding around values, stakeholders, community members, and goals, and scope of the strategy customers Phase 2 2024 determining the way forward detailed, collaborative option assessment and together recommendation of an approach Phase 3 2025 building consensus on the developing a phased long-term implementation implementation plan to 2030 strategy to 2050 and a detailed first phase implementation plan to 2030 In December of 2023, Council endorsed guiding principles for the project that were based on diverse engagement with the public, stakeholders, City committees, staff, and councillors: Table 2: Guiding Principles and Objectives As we evolve our energy business to continue to be financially successful and provide Guiding Principles Our intention Objectives 1: Make responsible, 1.1: Follow sound business practices accountable, and position our community-1.2: Take action quickly to manage risk and financially rewarding owned business for success maximize opportunity business decisions 1.3: Assess value holistically to find our best contribution 2: Serve customers 2.1: Pursue affordable, reliable, and as an affordable and customers and community predictable energy services reliable partner in the members as their trusted 2.2: Empower customers with choice and energy transitionpartner in the energy with trustworthy, accessible information 2.3: Bring people along as things change 3: Contribute to a 3.1: Collaborate with partners thriving community3.2: Do our part to address climate change 3.3: Use clear metrics and align them with community-scale goals 4. Plan for multiple 4.1: Rely on safe bet technologies and energy futures with solutions that can adapt to prepare for long shot technologies flexibility and focusand provide value in all 4.2: Prepare for a broad range of net-zero carbon futures 4.3: Iterate, experiment, and learn REPORT: Engagement to date At the beginning of Phase 2 in January 2024, dedicated engagement workshops were held with external stakeholders and internal Kitchener Utilities staffmembers to identify and explore potential business activities that could be investigated. From these, 237 submissions were received. Suggestions wereadded from the extensive comments that were received last year during engagement with community members, stakeholders, City committees, staff, and councillors, which resulted in 371 suggestions in total. After removing duplicates, 135 ideas were reviewed by staff. Business activities Matching the breadth of ideas that werereceived, staff have identified a broad rangeof potential energy business activities, which fitunder four main themes: ƦƌğƓ ŅƚƩ ğƓķ ƩĻƦƚƩƷ ƚƓ ƦƩƚǝźķĻ ĻƓĻƩŭǤ ƦƩƚǝźķĻ ƷŷĻ ŭğƭĻƚǒƭ ƦƩƚǝźķĻ ƭǤƭƷĻƒΏƭĭğƌĻ ƚǒƩ ŭğƭ ķźƭƩźĬǒƷźƚƓ (themes) ƦƩƚķǒĭƷƭ ğƓķ ƭĻƩǝźĭĻƭ͵ŅǒĻƌƭ ƚŅ ƷƚƒƚƩƩƚǞ͵ĻƓĻƩŭǤ ƭĻƩǝźĭĻƭ͵ ƭǤƭƷĻƒ͵ ƦƩƚǝźķźƓŭ ĻƓĻƩŭǤ ķĻǝĻƌƚƦźƓŭ ƦƚƌźĭźĻƭ ƒğƉźƓŭͲ ĬǒǤźƓŭͲ ƚƩ ŭĻƓĻƩğƷźƓŭ ğƓķ This might ĻƨǒźƦƒĻƓƷ ƭĻƩǝźĭĻƭ͵ğƓķ ƦƩƚŭƩğƒƭ ŅƚƩ ƚǒƩ ķĻƌźǝĻƩźƓŭ ĬźƚŅǒĻƌƭ ƭĻƌƌźƓŭ ƩĻƓĻǞğĬƌĻ ğƭƭĻƷƭ͵ΛĻ͵ŭ͵ ƩĻƓĻǞğĬƌĻ ĻƓĻƩŭǤ ğƷ ğ ƌğƩŭĻ ƦƩƚǝźķźƓŭĻƓĻƩŭǤ (types of ƓğƷǒƩğƌ ŭğƭΜ͵ƭĭğƌĻ͵ ƷƩğƓƭźƷźƚƓ ƭǒƦƦƚƩƷ ĻǝğƌǒğƷźƓŭ ğƓķ potential ƭĻƩǝźĭĻƭ͵ŅǒƷǒƩĻΏƦƩƚƚŅźƓŭ ƚǒƩ ƒğƉźƓŭͲ ĬǒǤźƓŭͲ ƚƩ business ŭğƭ ƩğƷĻƭ͵ķĻƌźǝĻƩźƓŭ ŷǤķƩƚŭĻƓ͵ ƩǒƓƓźƓŭ ğ ķźƭƷƩźĭƷ ƚƩ activities) ƓĻźŭŷĬƚǒƩŷƚƚķ ķĻǝĻƌƚƦźƓŭ ğķǝğƓĭźƓŭ ƚǒƩ ǞƚƩƉ ǒƷźƌźƷǤ͵ŅƚƩĻĭğƭƷƭͲ ƭĭĻƓğƩźƚƭ Ʒƚ ƷƩğĭƉ ğƓķ ĭƚƓƷğźƓ ğƓķ ƒƚķĻƌƭ Ʒƚ ŷĻƌƦ ǒƭ ŭğƭ źƓ ƚǒƩ ƭǤƭƷĻƒ͵ ŷĻƌƦźƓŭ ĭƚƒƒĻƩĭźğƌ ƦƌğƓ͵ ğƓķ źƓķǒƭƷƩźğƌ ĭǒƭƷƚƒĻƩƭ ƒĻĻƷ ƷŷĻźƩ ĻƓĻƩŭǤ ƓĻĻķƭ͵ Investigation to build a strategy It is expected that an integrated business approach will be recommended in the proposed strategy at the end of Phase 2, and that this approach could include a combination of different business activities. Staff have identified that each of the potential business activities that have been identified requires some amount of additional investigation to determine whether it could form a part of this integrated business approach. Conducting this investigation for the strategy is a significant body of work. Considerations for Investigation As part of this investigation, many different considerations need to be examined. These considerations will be strongly informed by the guiding principles for the project, which were endorsed by Council last year. Each guiding principle has three identified objectives. As detailed in the 2023 Discussion Paper, each of these objectives includes a range of considerations that were raised in the extensive Phase 1 engagement for the project, and identified in the Phase 1 Discussion Paper. Considerations proposed to be included in the investigation of each potential business activity are outlined in Appendix A. Next steps Staff are proceeding with the work, and currently convening individual project sub teams to advance the investigation of each of these business activities, with support as needed from consultants. Investigating the range and complexity of the potential business activities is expected to continue into early 2025, with the integrated strategy to follow. Discussion with City Council 1. What are your reflections on the business activity themes and what theme are you most curious about? 2. Referring to Appendix A, are there any considerations for investigation that you feel: a. Should be prioritized or de-prioritized b. Should be added STRATEGIC PLAN ALIGNMENT: This report supports Cultivating a Green City Together: Focuses on a sustainable path to a greener, healthier city; enhancing & protecting parks & natural environment while transitioning to a low-carbon future; supporting businesses & residents to make climate- positive choices. FINANCIAL IMPLICATIONS: The recommendation has no impact on the Capital Budget or Operating Budget at this time. COMMUNITY ENGAGEMENT: INFORM council / committee meeting. CONSULT As noted above, during Phase 1 of the project in 2023, extensive consultation took place with customers, community members, stakeholders, Kitchener committees, staff, and councillors. This engagement, combined with stakeholder engagement in January of 2024, has provided a large list of energy business activities that could be pursued. PREVIOUS REPORTS/AUTHORITIES: INS-2023-199 Kitchener Utilities Clean Energy Transition Update INS-2023-508 Phase 1 report and guiding principles for the Kitchener Utilities Clean Energy Transition Strategy APPROVED BY: Denise McGoldrick, GM Infrastructure Services ATTACHMENTS: None. Appendix A: Objectives and Considerations for Investigation Principle 1: Make responsible, accountable, and financially rewarding business decisions Objectives Investigation of each business activity will include 1.1: Follow sound business viability business practices safety, regulatory, legal, and risk considerations and implications fit with other business activities 1.2: Take action quickly how time-sensitive it is and how long it takes to to manage risk and implement maximize opportunity possible and expected changes to customer base, context, and market over time 1.3: Assess value high-level social and financial risks/costs/benefits holistically to find our best alignment with contribution strengths business competition profile whether other parties are better suited to do the work practicality of implementation Principle 2: Serve customers as an affordable and reliable partner in the energy transition Objectives Investigation of each business activity will include 2.1: Pursue affordable, cost and value of service to current and potential reliable, and predictable customers energy services affordability implications for diverse groups compatibility with a reliable energy system and customer experience ability to provide predictable service levels 2.2: Empower customers potential for customization with choice and with considerations for customer trust trustworthy, accessible opportunities for sharing information and stories information compatibility with supporting customers through their energy transitions 2.3: Bring people along potential to incorporate educational supports as things change potential customer and community buy-in staff development and training needs and opportunities Principle 3: Contribute to a thriving community Investigation of each business activity will include Objectives 3.1: Collaborate with compatibility and alignment with existing, partners developing, and potential partnerships GHG and energy use implications 3.2: Do our part to potential for address climate change scale of contribution to the transition off fossil fuels financial, energy, and GHG performance 3.3: Use clear metrics expectations and align them with benefits and limitations for affordability, equity, community-scale goals prosperity, resilience, and environment Principle 4: Plan for multiple energy futures with flexibility and focus Objectives Investigation of each business activity will include 4.1: Rely on safe bet reliance on safe bet technologies technologies and compatibility with long shot technologies and level prepare for long shot of preparation required technologies 4.2: Prepare for a broad compatibility with a broad range of modelled net- range of net-zero carbon zero pathways futures near-term flexibility alignment with long-term goals intergenerational fairness 4.3: Iterate, experiment, opportunities to iterate, experiment, and try new and learn things